The Difference Between Black Market and Gray Market Activities Is

question 13

Multiple Choice

The difference between black market and gray market activities is:

• A) while neither are included in GDP, black market items are illegal and gray market items are not.
• B) while neither are include in GDP, gray market items are illegal and black market items are not.
• C) black market items are very rare and difficult to find, and gray market items are more commonplace, like babysitting.
• D) black market items are typically expensive items, and gray market items are not.

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Definitions:

U.S. Tax System

The structured process by the government for collecting taxes from individuals, businesses, and other entities to fund public services and projects.

Operating Leverage

An indicator of how increases in revenue lead to expansions in operating income, showing the level of fixed expenses within a company's cost framework.

Fixed Costs

Costs that do not change with the level of goods or services produced by a business.

Variable Costs

Expenses that change in proportion to the activity of a business, such as the cost of raw materials or production costs.